Homeowners in trouble get more help

There’s so much good news about the economy and housing now you’d think we could put the recession behind us. But don’t start racking up more credit card debt just yet.

We all know people who have lost homes, or almost did, when they got behind on their mortgage payments. It was endemic during the worst years of the housing crisis.

The good news is that’s eased up a lot but there still are a surprising number of folks in trouble. A beefed up initiative in New Hampshire now will get more of them free help. This is thanks to last year’s $25 billion settlement between the nation’s five biggest lenders and the states.

The $43.6 million that NH got out of it will help pay for more HUD-approved mortgage counselors. These are the folks who will arm wrestle with mortgage holders on your behalf, and know how to get them to modify the terms so you can afford to stay in your home.

The service is free and they have a very good track record. In other words, these are not the scammers who advertise they’ll help you for an upfront fee.

We’re all mad about the gambling that went on with our mortgages, and the sleazy lending and marketing that put many of us into more house than we could afford. The crisis started in 2007 and peaked in 2010. Few Wall Street fat cats felt any pain because of it.

So it is a bit satisfying that this settlement, although late, will expand a worthwhile program that has helped distressed homeowners.

Who knew there still are so many people in trouble? The numbers don’t lie.

Consider that 274 foreclosure deeds were recorded in this state in March, and 523 foreclosure auction notices were published. The good news is these two indicators are down close to 20 percent from March of last year. But they still reveal we are a far cry from average in the good times.

The pre-recession mortgage delinquency rate was less than 4 percent. Most recently it was 7.1 percent in the fourth quarter of 2012. And a hurting 9 percent at its worst in fourth quarter 2009. That’s almost one in 10 homes behind in payments.

Richard Arcand is the spokesman for the NH Banking Department. He’s excited about the extra counselors the money will provide. His office has been getting calls from distressed homeowners for years now and has had to scramble at times to get them relief.

He estimates the Banking Department has handled 4,500 calls since late 2007 when the homeowner hot line was installed. It continues to get calls all the time.

The typical caller is one to two months behind on his or her mortgage payment due to job loss, divorce or medical bills. They are not getting a response from their lender or have begun to be hounded by creditors, and are scared and need help.

Sometimes they’ve already taken desperate and ill-advised measures such as tapping into retirement savings or gotten loans from relatives.

If they are within days of being foreclosed on (yes, some poor souls wait that long) Arcand’s office refers them to an attorney who can provide free legal help. When things are not as critical, they are referred to one of eight nonprofits in the state that provide HUD-approved counselors who work with the homeowner.

The three options are: loan modification; a graceful exit through a sale or deed in lieu of foreclosure; or the worst -- bankruptcy.

Time is critical.

“The sooner they call the better,” said Arcand. “We can get them to a counselor and get them help.”

One of the recipients of the extra funding will be Community Home Solutions in Seabrook.

Ellen Chase is the executive director and has been counseling homeowners in distress for seven years. Often she was the only HUD-approved counselor in her office. The new funds are paying for two more counselors and soon there will be four ready to help.

It’s been a tough few years, said Chase, who estimates she has helped 500-600 homeowners. The majority have been able to modify their mortgages and stay in their homes thanks to her.

“People ask ‘What do you get from nothing?’ But we are here to help and there is no fee. The system does work,” said Chase.

The process begins with contact.

The most important place to start is a special phone number set up in both New Hampshire and Maine. It’s 2-1-1. Three numbers that could change your life.

If you need more, the state website with lots of information is www.homehelpNH.org. The NH Banking Department homeowner hotline is 1-800-437-5991.

All will connect you with counselors or attorneys.

Before the new influx of settlement money, counselors were stretched thin and some areas had none. Now there is no reason anyone should go without good advice.

When a homeowner is referred to Chase, the first thing she asks is “Do you want to keep your house?”

Logical, since you could exit gracefully and move on. The vast majority do want to stay in their home but are not sure how.

Chase first collects financial statements from them, then contacts the lender. Sometimes, just locating who holds the mortgage can be a chore. After she makes contact, she talks their language and understands how to work with them. In the business it’s called “default intervention.”

She cautions that the homeowner has to have some income coming in. She is not a miracle worker.

But, for the majority of clients, she can often get a lender to agree to a rate reduction that will save them a few hundred dollars a month. Often it is enough to let them keep the house. There are other options as well.

A big factor is the type of hardship that created the crisis, said Chase. Lenders are amenable these days to working with her if there is a valid crisis.

Chase averages 125 cases a year and says the number of referrals has not seemed to slack off.

The housing market has improved but a lot of people still struggle to pay mortgages on homes valued far less then what they owe, she said.

Her message to the public is if you are struggling to pay your mortgage: don’t wait until you fall behind. Be proactive and use the free services that are available. Call 2-1-1 sooner rather than later.

In a way it’s payback from the financial system that gambled with our mortgages and got us in trouble in the first place. So use it.Jeremiah Turner can be reached at jturner@fosters.com.